What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-06-04 compared with 2023-05-10 · 474 added, 435 removed, 407 unchanged (69% of the section changed)

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financial statements and the related notes appearing elsewhere in this Amended Report.

This discussion contains forward-looking statements

that reflect our plans, estimates, and beliefs that involve risks and uncertainties.

This discussion contains forward-looking statements that

reflect our plans, estimates, and beliefs that involve risks and uncertainties.

As a result of many factors, such as those set forth

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and elsewhere in this Amended Report, our actual results may differ materially from those anticipated in these forward-looking statements.

Recent Developments

and Recent Developments

During FY 2023, the Company

addressed legacy issues while successfully regaining full compliance with Nasdaq’s continued listing rules and restarting operations

in order to stage Lottery.com for growth in FY 2024.

The cornerstone of the Company’s operational progress for FY 2024

will be driven by technology, product and service capability enhancements.

Amended Report is reflective of the Company’s commitment to transparency,

integrity, and responsible corporate governance.

The investment commitments from United Investments Capital London, including Prosperity

Investment Management and others, and investors placed by Univest Securities LLC, outlined in this report are evidence of investor belief

in Management’s capability to resume core lottery and gaming operations, monetize the Sports.com brand, and expand all the Company’s

brands across the globe.

Investigation and Operational Cessation

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also identified issues pertaining to the Company’s internal accounting controls (the “Internal Investigation”).

a report on the filings of the Internal Investigation, on June 30, 2022, the Board terminated the employment of Ryan Dickinson as

the Company’s President, Treasurer and Chief Financial Officer, effective July 1, 2022.

Subsequently, the Company initiated a review of its cash balances and related disclosures as well as its revenue recognition processes

and other internal accounting controls.

On July 20, 2022, Armanino LLP (“ Armanino ”), the Company’s

registered independent public accountant for the fiscal years ended December 31, 2021 and 2022, advised the Company that its audited financial

statements of for the year ended December 31, 2021 (the “2021 Audit”) and the unaudited financial statements for the quarter

ended March 31, 2022 (the “March 2022 Financials”), should no longer be relied upon.

Armanino advised that it had determined,

subsequent to the 2021 Audit and review of the March 2022 Financials, that the Company had entered into a line of credit in January 2022

that was not disclosed in the footnotes to the 2021 Audit and was not properly recorded in the March 2022 Financials (see Note 3 to our

consolidated financial statements for more details).

a report on the filings of the Internal Investigation, on June 30, 2022, the Board terminated the employment of Ryan Dickinson as the

Company’s President, Treasurer and Chief Financial Officer, effective July 1, 2022.

Subsequently, the Company initiated a review

of its cash balances and related disclosures as well as its revenue recognition processes and other internal accounting controls.

July 20, 2022, Armanino LLP (“Armanino”), the Company’s registered independent public accountant for the fiscal years

ended December 31, 2021 and 2020, advised the Company that its audited financial statements for the year ended December 31, 2021 (the

“2021 Audit”) and the unaudited financial statements for the quarter ended March 31, 2022 (the “March 2022 Financials”),

should no longer be relied upon.

Armanino advised that it had determined, subsequent to the 2021 Audit and review of the March 2022 Financials,

that the Company had entered into a line of credit in January 2022 that was not disclosed in the footnotes to the 2021 Audit and was

not properly recorded in the March 2022 Financials.

July 28, 2022, the Board determined that the Company did not have sufficient financial resources to fund its operations or pay certain

existing obligations, including its payroll and related obligations, due to a significant misstatement of our cash balances.

following day, on July 29, 2022, the Company effectively ceased operations (the “Operational Cessation”), when it furloughed

the majority of its employees and generally suspended its lottery game sales.

The Company’s remaining employees were limited to

the heads of the product, information technology and human resources teams as well as the entire legal and compliance team.

week, several additional employees were recalled from furlough.

All non-furloughed employees were retained, at the discretion of the

Company’s then Chief Operating Officer and Chief Legal Officer, to provide the minimal business functions needed to address the

Company’s legal and compliance issues and to secure necessary funding to resume the Company’s operations.

Less than half

of these non-furloughed employees remain active in the efforts to restore Company operations and as of March 31, 2023, approximately

$1.4 million in outstanding payroll obligations remain unpaid.

September 27, 2022, Armanino resigned as the independent registered public accounting firm of the Company, effective immediately.

October 7, 2022, the Audit Committee approved the engagement of Yusufali & Associates, LLC, (“Yusufali”) as the Company’s

new independent registered public accounting firm.

the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused its operations on restarting certain

of its core business (as described in more detail under “— Plans for Recommencement of Company Operations ” below),

completing the restatement of the Company’s 2021 Audit (which is included in this Amended Report) and March 2022 Financials and

preparing the Company’s Quarterly Reports on Form 10-Q for the quarters ended June 30, 2022 and September 30, 2022 and Annual Report

on Form 10-K for the year ended December 31, 2022.

The following day, on July 29, 2022, the Company effectively ceased operations

(the “Operational Cessation”), when it furloughed the majority of its employees and generally suspended its lottery game sales.

The Company’s remaining employees were retained at the discretion of the Company’s then Chief Operating Officer and Chief

Legal Officer in order to provide the minimal business functions needed to address the Company’s legal and compliance issues and to

secure necessary funding to resume the Company’s operations.

Less than twenty percent of these non-furloughed employees remain active

in the efforts to restore Company operations.

Approximately $3.85 million in outstanding payroll and $1.0

million in outstanding director compensation obligations was unpaid as of December 31, 2023.

September 27, 2022, Armanino resigned as the independent registered public accounting firm of the Company, effective immediately and

subsequently, on October 7, 2022, the Audit Committee approved the engagement of Yusufali & Associates, LLC, (“Yusufali”)

as the Company’s new independent registered public accounting firm.

the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused its operations on restarting

certain of its core businesses (as described in more detail under “- Plans for Recommencement of Company

Operations ” below), and completing and filing the following (i) the restatements of the Company’s 2021 Audit and

March 2022 Financials and preparing and filing the Company’s delinquent periodic reports, including Amendment No.

Company’s Annual Report on Form 10-K/A for the year ended December 31, 2021, which the Company filed on May 10, 2023:

Amendment No.

1 to the Company’s Quarterly Report on Form 10-Q/A for the three months ended March 31, 2022, which the Company

filed on May 15, 2023;

(iii) the Company’s Quarterly Reports on Form 10-Q for the three months ended June 30, 2022 and

September 30, 2022, which the Company filed on May 22 and 24, 2023, respectively;

(iv) the Company’s Annual Report on Form

10-K for the year ended December 31, 2022, (v) the Company’s Quarterly Report on Form 10-Q for the three months ended March

(vi) the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2023;

(vii) the Company’s

Quarterly Report on Form 10-Q for the three months ended September 30, 2023;

and (vii) this Amended Report.

March 23, 2023, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”) to appeal a determination

by the Listing Qualifications department (the “Staff”) of Nasdaq dated February 23, 2023, to delist the Company’s securities

At the hearing before the Panel on April 24, 2023, the Company presented its plan to complete the restatement of its financial

statements for the fiscal year ended December 31, 2021, and the subsequent quarter ended March 31, 2022, and to file the amended periodic

reports and all subsequent required filings with the SEC.

The Company requested the continued listing of its securities on Nasdaq pending

the completion of its compliance plan.

letter dated May 8, 2023, the Panel granted the Company’s request for continued listing, on an interim basis, subject to the Company

submitting financial projections for fiscal 2023 and filing the restated financial statements for the fiscal year ended December 31,

2021, and quarter ended March 31, 2022, with the SEC by May 15, 2023.

The Company satisfied these conditions and the Panel indicated

that it would review the filings, along with the updated projections, and thereafter determine whether to afford the Company additional

time to complete the compliance plan presented at the hearing.

letter dated May 24, 2023, the Panel notified the Company that it had determined to suspend trading and otherwise move to delist the

Company’s securities from Nasdaq effective with the open of the market on May 26, 2023.

The Company’s securities were suspended

from trading on that date but the securities were not delisted because the Company thereafter requested that the Panel reconsider its

determination to delist the Company’s securities from Nasdaq based upon what the Company believed to be mistakes of material fact

upon which the Panel had based its decision.

June 8, 2023, the Panel notified the Company that it had determined to reverse its prior decision and grant the Company’s

request for continued listing subject to the Company’s timely compliance with a number of conditions ultimately expiring on

August 17, 2023, on which date the Company must satisfy all applicable criteria for continued listing on Nasdaq (the “June

8 th Decision”).

As a result of the foregoing, the suspension from trading ceased and the Company’s securities

were reinstated for trading on Nasdaq effective with the open of the market on June 15, 2023.

See “ Risk Factors - Risks

Related to Our Common Stock and Warrants – Although we are currently in full compliance with the continued listing standards

However, we may not be able to remain in full compliance with Nasdaq’s continued listing standards in the

future ” for more information.

reported on form 8-K filed on December 7, 2023, on November 29, 2023, the Company received a letter from Nasdaq stating that based upon

its review of the Company’s Market Value of Publicly Held Shares (“MVPHS”) for the last 30 consecutive business days,

the Company no longer met the minimum requirement of $5,000,000 set forth in Nasdaq Listing Rule 5450(b)(1)(C).

However, under the Listing

Rules, the Company was provided a 180-calendar day grace period to regain compliance, through May 28, 2024.

at any time during the compliance period the Company’s MVPHS closes at $5,000,000 or more for a minimum of ten consecutive business

days, Nasdaq will provide written confirmation of compliance and the matter will be closed.

The company received such notification from

Nasdaq on April 10, 2024 and the matter was closed.

the requirement that we maintain a majority of independent directors and at least three members on our audit committee are Nasdaq requirements

that we currently meet but have not met from time to time.

the Company’s securities are delisted from Nasdaq, it could be more difficult to buy and sell the Company’s common stock

and warrants or to obtain accurate quotations, and the price of the Company’s common stock and warrants could suffer a material

Delisting could also impair the Company’s ability to raise capital and/or trigger defaults and penalties under its outstanding

agreements or securities.

Further, even if we regain compliance with Nasdaq listing requirements, there is no guarantee that we will

be able to maintain our listing for any period of time.

from Nasdaq could also result in negative publicity.

Further, if we are delisted, we would also incur additional costs under state blue

sky laws in connection with any sales of our securities.

These requirements could severely limit the market liquidity of our common stock

and/or warrants and the ability of our stockholders to sell our common stock and/or warrants in the secondary market.

If our common stock

and/or warrants are delisted by Nasdaq, our common stock and/or warrants may be eligible to trade on an over-the-counter quotation system,

such as the OTCQB Market, where an investor may find it more difficult to sell our stock or obtain accurate quotations as to the market

value of our common stock and/or warrants.

In the event our common stock and/or warrants are delisted from The Nasdaq Global Market,

we may not be able to list our common stock and/or warrants on another national securities exchange or obtain quotation on an over-the

counter quotation system.

$30,000,000 Business Loan

January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”),

pursuant to which the Company borrowed $30,000,000 from Provident, which was evidenced by a $30,000,000 Promissory Note.

January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with bank prov,

pursuant to which the Company borrowed $30,000,000 from bank prov, which was evidenced by a $30,000,000 Promissory Note.

The Promissory

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The Business Loan included representations and warranties of AutoLotto and covenants (both positive and negative) which

were customary of a customary for a transaction of this nature and size, including rights to set off.

were customary for a transaction of this nature and size, including rights to set off.

Upon the occurrence of an event

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We were required to pay a 1% commitment fee at

the time of our entry into the Business Loan, and another 1% annual loan fee on the first year anniversary thereof.

In accordance with the terms of the Business Loan, upon entering into the

agreement, $30,000,000 in a separate account with Provident was pledged as security for the amount outstanding under the loan (“Collateral

The $30,000,000 Collateral Security became restricted and remained restricted until October 12, 2022, when AutoLotto

defaulted on its obligations under the Business Loan and Provident foreclosed on the $30,000,000 of Collateral Security.

The Collateral

Security, which was in the form of restricted cash, was presented as a contingent liability on the Company’s balance sheet from

March 31, 2022 until the obligation was satisfied in October of 2022.

See Note 3 to our consolidated financial statements for additional

the time of our entry into the Business Loan, and another 1% annual loan fee would have been due on the first anniversary thereof.

accordance with the terms of the Business Loan, upon entering into the agreement, $30,000,000 in a separate account with bank prov was

pledged as security for the amount outstanding under the loan (“Collateral Security”).

The $30,000,000 Collateral Security

became restricted and remained restricted until October 12, 2022, when AutoLotto defaulted on its obligations under the Business Loan

and bank prov foreclosed on the $30,000,000 of Collateral Security.

The Collateral Security, which was in the form of restricted cash,

was presented as a contingent liability on the Company’s balance sheet from March 31, 2022 until the obligation was satisfied in

October of 2022.

See Note 3i to our consolidated financial statements for additional information.

Agreement with Woodford

December 7, 2022, the Company entered into a loan agreement (the “Loan Agreement”) with Woodford Eurasia Assets, Ltd.

(“ Woodford ”),

pursuant to which Woodford agreed to provide the Company with up to $2.5 million, subject to certain conditions and requirements, of

which approximately $1.25 million has been received to date and $1.25 million is currently owed pursuant to the terms of the Loan

The parties may also mutually agree to increase the amount of the loan to $52.5 million (i.e., an additional $50 million).

Amounts borrowed accrue interest at the rate of 12% per annum (or 22% per annum upon the occurrence of an event of default) and are due

within 12 months of the date of each loan.

Amounts borrowed can be repaid at any time without penalty.

borrowed pursuant to the Loan Agreement are convertible, at Woodford’s option, into shares of the Company’s common stock,

beginning 60 days after the first loan date at the rate of 80% of the lowest publicly available price per share of common stock within

10 business days of the date of the Loan Agreement (which was equal to $0.28 per share), subject to a 4.99% beneficial ownership limitation

and a separate limitation preventing Woodford from holding more than 19.99% of the issued and outstanding common stock of the Company,

without the Company obtaining shareholder approval for such issuance.

December 7, 2022, the Company entered into a loan agreement with Woodford Eurasia Assets, Ltd.

(“Woodford”), (the “Woodford

Loan Agreement”) pursuant to which Woodford agreed to provide the Company with up to $52.5 million, subject to certain conditions

and requirements, of which, per the Company’s books and records $798,351 was received by December 31, 2023 and is owed pursuant

to the terms of the Woodford Loan Agreement.

Amounts borrowed accrue interest at the rate of 12% per annum (or 22% per annum upon the

occurrence of an event of default) and are due within 12 months of the date of each loan advance.

Amounts borrowed can be repaid at any

time without penalty.

borrowed pursuant to the Woodford Loan Agreement are convertible, at Woodford’s option, into shares of the Company’s common

stock, beginning 60 days after the first loan date at the rate of 80% of the lowest publicly available price per share of common stock

within 10 business days of the date of the Loan Agreement (which was equal to $5.60 per share), subject to a 4.99% beneficial ownership

limitation and a separate limitation preventing Woodford from holding more than 19.99% of the issued and outstanding common stock of

the Company, without the Company obtaining shareholder approval for such issuance.

to the Loan Agreement included the resignation of four prior members of the Board (Lisa Borders, Steven M.

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and William Thompson, all of whom resigned from the Board in September 2022), and the appointment of two new independent directors.

loans under the Loan Agreement also require the Company to comply with all listing requirements, unless waived by Woodford.

Agreement also allows Woodford to nominate another director to the Board of Directors, in the event any independent member of the Board

of Directors resigns.

loans under the Woodford Loan Agreement also require the Company to comply with all listing requirements, unless waived by Woodford.

The Woodford Loan Agreement also allows Woodford to nominate another director to the Board of Directors, in the event any independent

member of the Board of Directors resigns.

of the loans can only be used by to restart the Company’s operations and for general corporate purposes agreed to by Woodford.

Loan Agreement includes confidentiality obligations, representations, warranties, covenants, and events of default, which are customary

for a transaction of this size and nature.

Included in the Loan Agreement are covenants prohibiting us from (a) making any loan in excess

of $1 million or obtaining any loan in amount exceeding $1 million without the consent of Woodford, which consent may not be unreasonably

Woodford Loan Agreement includes confidentiality obligations, representations, warranties, covenants, and events of default, which

are customary for a transaction of this size and nature.

Included in the Loan Agreement are covenants prohibiting us from (a) making

any loan in excess of $1 million or obtaining any loan in an amount exceeding $1 million without the consent of Woodford, which

consent may not be unreasonably withheld;

(b) selling more than $1 million in assets;

(d) encumbering any assets, except in the normal course of business, and not in an amount to exceed $1 million;

or restating our governing documents;

perform our obligations under the Loan Agreement;

(d) encumbering any assets, except in the normal course of business, and not in an

amount to exceed $1 million;

(e) amending or restating our governing documents;

(f) declaring or paying any dividend;

(g) issuing any shares which negatively affects Woodford;

any shares which negatively affects Woodford;

and (h) repurchasing any shares.

Company also agreed to grant warrants to purchase shares of common stock to Woodford (the “Woodford Warrants”) in an amount

equal to 15% of the Company’s 7,619,207 issued and outstanding shares of common stock.

Each Woodford Warrant has an exercise price

equal to the average of the closing price of the Company’s common stock for each of the ten days prior to the first amount being

debited from the bank account of Woodford, which equates to an exercise price of $0.28 per share.

In the event the Company fails to repay

the amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset

by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount (i.e., will

equal $0.21 per share).

In connection with our entry into

the Loan Agreement, the Company also entered into a Loan Agreement Deed, Debenture Deed and Securitization, with Woodford (the “Security

Agreement”), which provides Woodford with a first floating charge security interest over all present and future assets of the Company

in order to secure the repayment of amounts owed under the Loan Agreement.

The floating charge may be converted into a fixed charge upon

the occurrence of certain events including:

an event of default;

if Woodford reasonably believes that any secured property may be in jeopardy

or danger of being seized or sold;

or if Woodford reasonably considers that it is desirable to protect its security interest.

charge may be automatically converted into a fixed charge upon the occurrence of certain other events.

The Security Agreement prohibits

the Company from providing any other security interest over our assets, even if secondary to Woodford, while the amounts borrowed under

the Loan Agreement remain unpaid.

October 29, 2021, we consummated the Business Combination with Trident Acquisitions Corp.

(“TDAC” and after the Business

Combination described herein, the “Company”), pursuant to the terms of that certain Business Combination Agreement, dated

as of February 21, 2021 (the “Business Combination Agreement”), by and among TDAC, Trident Merger Sub II Corp., a wholly-owned

subsidiary of TDAC (“Merger Sub”) and AutoLotto.

Pursuant to the terms of the Business Combination Agreement, Merger Sub

merged with and into AutoLotto with AutoLotto surviving the merger as a wholly owned subsidiary of TDAC, which was renamed “Lottery.com

Inc.” The aggregate value of the consideration paid by TDAC to the holders of AutoLotto common stock in the Business Combination

(excluding shares that may be issued to former AutoLotto stockholders (the “Sellers”) as earnout consideration) was approximately

$440 million, consisting of approximately 40,000,000 shares of common stock valued at $11.00 per share.

In addition, the Sellers and

TDAC’s founders are also entitled to receive up to 3 million and 2 million additional shares of common stock, respectively, to

the extent that certain share price targets are achieved following the Closing.

equal to 15% of the Company’s then issued and outstanding shares of common stock.

Each Woodford Warrant has an exercise price equal

to the average of the closing price of the Company’s common stock for each of the ten days prior to the first amount being debited

from the bank account of Woodford, which equates to an exercise price of $5.60 per share.

In the event the Company fails to repay the

amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset

by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount.

In connection with our entry into the Woodford Loan Agreement, the Company also entered into a Loan Agreement Deed, Debenture Deed and

Securitization, with Woodford (the “Security Agreement”), which provides Woodford with a first floating charge security interest

over all present and future assets of the Company in order to secure the repayment of amounts owed under the Loan Agreement.

June 12, 2023, the Company entered into an amendment of the Woodford Loan Agreement (the “Woodford Loan Agreement Amendment”).

The Woodford Loan Agreement Amendment provides that Woodford shall henceforth be able to convert, in whole or in part, the outstanding

balance of its loan into the conversion shares at a conversion price that represents a further 25% discount to the original conversion

price of 20%.

The validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.

Despite requests from the Company, Woodford has repeatedly amongst other things:

failed to prove the amounts borrowed by the Company or

claimed to have been advanced by Woodford to the Company;

failed to indicate if it would accept accelerated payment of those verified

failed to provide an anti-money laundering acceptable account to which payment could be made by the Company and failed to explain

failure to respond to requests for other funding to be accepted in the context of the Woodford Loan Agreement;

failed to respond to requests

for funding under the accordion facility of the Woodford Loan Agreement;

and failed to respond to allegations of money laundering and

conspiracy to defraud the Company and others.

Information regarding ongoing legal proceedings with Woodford can be found in the “Legal Proceedings” section of this form.

October 29, 2021, we, as AutoLotto, Inc.

(“AutoLotto”), consummated the Business Combination with Trident Acquisitions Corp.

(“TDAC” and after the Business Combination described herein, the “Company”), pursuant to the terms of that certain

Business Combination Agreement, dated as of February 21, 2021 (the “Business Combination Agreement”), by and among TDAC,

Trident Merger Sub II Corp., a wholly-owned subsidiary of TDAC (“Merger Sub”) and AutoLotto.

Pursuant to the terms of the

Business Combination Agreement, Merger Sub merged with and into AutoLotto with AutoLotto surviving the merger as a wholly owned subsidiary

of TDAC, which was renamed “Lottery.com Inc.” The aggregate value of the consideration paid by TDAC to the holders of AutoLotto

common stock in the Business Combination (excluding shares that may be issued to former AutoLotto stockholders (the “Sellers”)

as earnout consideration) was approximately $440 million, consisting of approximately 2,000,000 shares of common stock valued at $220.00

In addition, each Seller shall receive its pro rata portion of 150,000 Seller Earnout Shares and each Founder Holder shall

receive one-third of 100,000 Founder Holders Earnout Shares, subject to adjustments in the normal course of business.

Reverse Stock Split

On August 9, 2023, the Company

amended its Charter to implement, effective at 5:30 p.m., Eastern time, a 1-for-20 Reverse Stock Split.

At the effective time of the Reverse

Stock Split, every 20 shares of common stock either issued and outstanding or held as treasury stock were automatically combined into

one issued and outstanding share of common stock, without any change in the par value per share.

Stockholders who would have otherwise

been entitled to fractional shares of common stock as a result of the Reverse Stock Split received a cash payment in lieu of receiving

fractional shares.

In addition, as a result of the Reverse Stock Split, proportionate adjustments will be made to the number of shares

of common stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s

outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements,

as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable.

The Reverse Stock Split was approved

by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders on August 7, 2023 and was subsequently

approved by the Board of Directors on August 7, 2023.

effects of the Reverse Stock Split were reflected in the Quarterly Report on Form 10-Q for the period ended September 30, 2023 and

in all subsequent reports for all periods presented.

International

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games of chance in other countries throughout Latin America.

As of December 31, 2020, Latin America’s estimated lottery market

was approximately $9.1 billion across 26 countries.

As of December 31, 2020, (the most recent date available) the addressable market

in the countries that JuegaLotto and Aganar cover includes 664 million people and potential customers.

We believe these acquisitions

will provide inroads for the Company throughout Mexico and Latin America as we expand our international operations, expand our portfolio

of products, and expose our existing products to new markets.

As of the date of this Amended Report, according to Statista, the estimated size

of the Latin American lottery market is $.68 billion with a compound annual growth rate projected at 6.05% through 2028.

it is projected that there will be 3,000,000 online lottery players in the South American lottery market alone by 2028.

Based on these

projections, we believe these acquisitions will provide opportunities for growth of our international operations throughout Mexico and

Latin America as we expand our portfolio of products and expose our existing products to new markets.

Prior to Operational Cessation

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the creation of an account and purchase of a lottery game with minimum friction and without the creation of a mobile wallet or requirement

to pre-load minimum funds and — importantly — to provide instant confirmation of the user’s lottery game numbers, whether

selected at random or picked by the user.

to pre-load minimum funds and - importantly - to provide instant confirmation of the user’s lottery game numbers, whether selected

at random or picked by the user.

Users of our B2C Platform services paid a service fee and, in certain non-U.S.

jurisdictions,

a mark-up on the purchase price.

jurisdictions, a mark-up

on the purchase price.

Prior to the Operational Cessation, we generated revenue from this service fee and mark-up.

Our B2B API Platform resumed limited operations in April 2023.

date of this Amended Report, our B2C Platform is not currently operational.

We anticipate that our B2C Platform will become operational

in the third quarter of 2023.

Our B2B API Platform

resumed limited operations for the month of April 2023.

As of the date of this Amended Report, our B2C Platform is not currently available to

We anticipate that our B2C Platform will become available again by mid-year 2024.

WinTogether Platform

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donations to a campaign, from which we paid certain dividends and all administration costs.

WinTogether platform continued operating after the Operational Cessation, until all sweepstakes campaigns were completed and all

prizes awarded.

WinTogether platform continued operating after the Operational Cessation, until all sweepstakes campaigns were completed, and all prizes

On March 29, 2023, the board of directors of WinTogether voted to suspend its relationship with the Company.

the Operational Cessation, certain of the Company’s wholly-owned subsidiaries have continued to operate under the direction of

the leadership teams that were in place prior to the Company’s acquisition of such companies.

While the operational activities

of these subsidiaries vary, from the Operational Cessation through the date of this Amended Report, each of TinBu, Aganar and JuegaLotto

has decreased its expenses and has had its revenue remain consistent or decrease slightly from pre-Operational Cessation levels.

The suspension

of the relationship was rescinded by the WinTogether board on November 16, 2023.

WinTogether is now operating under the DonateTo.Win brand.

the Operational Cessation, the Company’s subsidiaries have continued to operate under the direction of the leadership teams

that were in place prior to the Company’s acquisition of such companies.

While the operational activities of these

subsidiaries vary, from the Operational Cessation through the date of this Amended Report, each of Aganar and JuegaLotto have

decreased their expenses and has had their revenues remain consistent or decrease slightly from pre-Operational Cessation levels.

TinBu has decreased its expenses and had their revenues remain consistent for a period of time but revenue is now beginning to decrease

from pre-Operational Cessation levels.

2018, we acquired TinBu, LLC (“TinBu”), a digital publisher and provider of lottery data results, jackpots, results, and

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organizations.

See “ Item 1A.

Risk Factors – We are party to pending litigation and investigations in various jurisdictions

and with various plaintiffs and we may be subject to future litigation or investigations in the operation of our business.

outcome in one or more proceedings could adversely affect our business, financial condition, and results of operations ” for

more information about our relationship with Tinbu.

technology pulls real time primary source data, and, in some instances, we acquire data from dedicated data feeds from the lottery authorities.

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under the brand name Capalli.

See “ Item 1A.

Risk Factors – We need additional capital to, among other things, support

and restart our operations, re-hire employees and pay our expenses.

Such capital may not be available on commercially acceptable terms,

If we do not receive the additional capital, we may be forced to curtail or abandon our plans to recommence our operations

and we may need to permanently cease our operations” for additional information.

December 2021, we finalized the acquisition of the domain name https://sports.com and on November 15, 2022, we formed a wholly-owned

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The DSG Data is being sold through the same sales resources and sales channels as the lottery data offered by TinBu.

This relationship

is in full effect now and the first signed contracts are expected in the second quarter of 2023.

On July 23, 2023,

DSG exercised its right to terminate the exclusive distribution rights due to Sports.com not meeting its contractual obligations.

Nook Holdings, LTD

September 28, 2023, the company entered into Stock Purchase Agreement with the shareholders of Nook

Holdings Limited (“Nook”), a private limited company incorporated and registered in the Abu Dhabi Global Market, Abu Dhabi,

United Arab Emirates (“UAE”).

The total purchase price is approximately $2.314 million.

The Company made three payments totaling

$137,500 in the fourth quarter and anticipates the transaction closing by June 30, 2024 or as otherwise agreed by the parties.

is known for its innovative approach to co-working in Dubai and has procured 200 licenses for individuals and companies in the sports,

health and wellness sector seeking access to Dubai and the broader Middle Eastern market.

With its exclusive partnership with the Dubai

Multi-Commodities Centre Free Zone (DMCC), Nook offers a wide range of services, including business setup support, insurance, VAT registration,

and networking opportunities for like-minded sports entrepreneurs.

As part of the acquisition, Nook will be rebranded under the Sports.com

for Recommencement of Company Operations

noted above, since the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused its operations

on restarting certain of its core business.

noted above, since the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused on restarting certain of its core businesses.

The Company has developed a three-phase plan to recommence its operations, which plan is

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1 - Relaunch B2B API Platform .

During the Operational Cessation, the Company maintained positive relationships with

its ticket-printing and courier partners, as well as several distribution partners that have been found to be in compliance with

During the Operational Cessation, the Company maintained positive relationships with its ticket-printing

and courier partners, as well as several distribution partners that have been found to be in compliance with local, state, and federal

rules related to ticket procurement and distribution.

These partners have implemented the Lottery.com API and have advised the Company

that they expect to be ready to offer lottery games to their customers through their sales channels when the Company resumes operations.

As such, the Company believes that it has sufficient demand to resume operation of its B2B API platform operations, assuming it is able

to maintain the core employee team to manage the lottery ticket fulfillment process and access sufficient capital to relaunch Project

Nexus, which was designed to, among other things, handle high levels of user traffic and transaction volume, while maintaining expediency,

security, and reliability in the administrative and back-office functionality required by the B2B API.

Our B2B API Platform resumed limited

operations in April 2023.

2 - Resume B2C Platform Operations.

The Company believes that it will be in a position to relaunch its B2C Platform by mid-year 2024.

As of the date of this Amended Report, the Company expects that it will initially relaunch its B2C Platform to customers in Texas for a period

of time before rolling it out to other jurisdictions.

The Company may elect to accelerate the relaunch of its Platform to customers in

another state.

The Company plans to limit the rollout in order to give it additional time to properly vet and confirm compliance with

local, state and federal rules related to ticket procurement and distribution.

These partners have implemented the Lottery.com API

and have advised the Company that they expect to be ready to offer lottery games to their customers through their sales channels

when the Company resumes operations.

As such, the Company believes that it has sufficient demand to resume operation of its B2B API

platform operations, assuming it is able to maintain the core employee team to manage the lottery ticket fulfillment process and

access sufficient capital to relaunch Project Nexus, which was designed to, among other things, handle high levels of user traffic

and transaction volume, while maintaining expediency, security, and reliability in the administrative and back-office functionality

required by the B2B API.

Our B2B API Platform resumed limited operations in April 2023.

Phase 2 – Resume B2C

Platform Operations.

The Company believes that it will be in a position to relaunch its B2C Platform in the third quarter of 2023.

As of the date of this Amended Report, the Company expects that it will initially relaunch its B2C Platform to customers in Texas for

a period of time before rolling it out to other jurisdictions.

If the Texas Bill is enacted into law as drafted, the Company may elect

to accelerate the relaunch of its Platform to customers in another state.

The Company plans to limit the rollout in order to give it additional

time to properly vet and confirm compliance with local, state and federal rules related to ticket procurement and distribution.

information, see “ Item 1A.

Risk Factors – Regulatory and Compliance Risks – A jurisdiction may enact, amend, or reinterpret

laws and regulations governing our operations in ways that impair our revenues, cause us to incur additional legal and compliance costs

and other operating expenses, or are otherwise not favorable to our existing operations or planned growth, all of which may have a material

adverse effect on us or our results of operations, cash flow, or financial condition .” The Company has also maintained various

pre-paid media credits that it expects to use to launch and maintain promotional campaigns geared towards encouraging prior customers

to return to the Platform and to acquire new customers.

Phase 3 – Restore Other

Business Lines and Projects.

Assuming the success of Phase 1 and Phase 2, the Company expects to restore other products it used to

offer, such as supplying lottery tickets to consumers in approved domestic jurisdictions, partnering with licensed providers in international

jurisdictions to supply legitimate domestic lottery games, and reviving other products and services that were under development when the

Operational Cessation occurred.

As of the date of this Amended Report, the current estimated cash balance

of the Company and subsidiaries is approximately $366,600.

The Company believes that this cash on hand, along with future borrowings,

will be sufficient for the Company to pay its service providers to complete and file its deficient periodic reports, including this Amended

Report, the amended Quarterly Report on Form 10-Q/A for the three months ending March 31, 2022, the Quarterly Reports on Form 10-Q for

the periods ending June 30, 2022 and September 30, 2022, and the Annual Report on Form 10-K for the year ended December 31, 2022.

of the date of this Amended Report, our common stock and warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”)

under the ticker symbols “LTRY” and “LTRYW,” respectively.

As of the date of this Amended Report, we are not

in compliance with Nasdaq’s continued listing requirements (the “Listing Rules”), as discussed in greater detail

below under “ Risk Factors” – “Risks Related to Our Common Stock and Warrants” – “We are

not currently in compliance with the continued listing standards of Nasdaq and may not be able to comply with Nasdaq’s

continued listing standards in the future ,” and have presented a plan to regain compliance with the Listing Rules that was

recently conditionally accepted by a hearing panel.

Additionally, under its new management, the Company continues to work to

improve its disclosure and reporting controls, and plans to overhaul its systems of internal control over financial reporting and

invest in additional legal, accounting, and financial resources.

if the Company’s three phase plan to recommence its operations is successful, there can be no assurance that the Company

will be able to regain compliance with the applicable Listing Rules, or that the hearings panel will stay the delisting of the Company’s

securities from Nasdaq.

If the Company’s securities are delisted from Nasdaq, it could be more difficult to buy or sell the Company’s

common stock and warrants or to obtain accurate quotations, and the price of the Company’s common stock and warrants could suffer

a material decline.

Delisting could also impair the Company’s ability to raise additional capital needed to funds its operations

and/or trigger defaults and penalties under outstanding agreements or securities of the Company.

For more information, see “ Item 1A.

- Regulatory and Compliance Risks - A jurisdiction may enact, amend, or reinterpret laws and regulations governing our operations in

ways that impair our revenues, cause us to incur additional legal and compliance costs and other operating expenses, or are otherwise

not favorable to our existing operations or planned growth, all of which may have a material adverse effect on us or our results of operations,

cash flow, or financial condition .” The Company has also maintained various pre-paid media credits that it expects to use to

launch and maintain promotional campaigns geared towards encouraging prior customers to return to the Platform and to acquire new customers.

3 - Restore Other Business Lines and Projects.

Assuming the success of Phase 1 and Phase 2, the Company expects to restore other

products it used to offer, such as supplying lottery tickets to consumers in approved domestic jurisdictions, partnering with licensed

providers in international jurisdictions to supply legitimate domestic lottery games, and reviving other products and services that were

under development when the Operational Cessation occurred.

of the date of this Amended Report, the current estimated cash balance of the Company and subsidiaries is approximately $63,346.

believes that this cash on hand, along with future borrowings, will be sufficient for the Company to resume its core operations.

of the date of this Amended Report, our common stock and warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the

ticker symbols “LTRY” and “LTRYW,” respectively.

As of the date of this Amended Report, we are in compliance with Nasdaq’s

continued listing requirements (the “Listing Rules”).

See, “ Risk Factors - Risks Related to Our Common Stock and

Warrants – Although we are not currently in full compliance with the continued listing standards of Nasdaq, we may not be able

to remain in full compliance with Nasdaq’s continued listing standards in the future .” Additionally, under its new management,

the Company continues to work to improve its disclosure and reporting controls.

Also, the Company plans to overhaul its systems of internal

control over financial reporting and invest in additional legal, accounting, and financial resources.

if the Company’s three phase plan to recommence its operations is successful, there can be no assurance that the Company will be

able to fully regain compliance with the applicable Listing Rules, or that the Nasdaq Panel will continue to stay the delisting of the

Company’s securities on Nasdaq.

If the Company’s securities are delisted from Nasdaq, it could be more difficult to buy or

sell the Company’s common stock and warrants or to obtain accurate quotations, and the price of the Company’s common stock

and warrants could suffer a material decline.

Delisting could also impair the Company’s ability to raise additional capital needed

to fund its operations and/or trigger defaults and penalties under outstanding agreements or securities of the Company.

can be no assurance that we will have sufficient capital to support our operations and pay expenses, repay our debt, or that additional

funds will be available on favorable terms, if at all.

We may not be able to restart our operations and/or generate sufficient funding

We may not be able to restart our operations or generate sufficient funding

to support such operations in the future.

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of liabilities that might result from the outcome of this uncertainty.

managing our business and assessing financial performance, we supplement the information provided by our financial statements with other

operating metrics.

We use these metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate

projections and make strategic decisions.

The primary operating metrics we use are:

per transaction;

revenue per transaction;

profit per transaction;

margin per transaction.

metrics help enable us to evaluate pricing, cost and customer profitability.

We believe it is useful to provide investors with the same

metrics that we use internally to make comparisons of our historical operating results, identify trends in our operating results and

evaluate our business.

These metrics track our B2C business and exclude users who were referred by an affiliate or who made purchases

through an API partner.

Year Ended December 31,

Transactions Per User

Tickets Per Transaction

Gross Revenue Per Transaction

Gross Profit Per Transaction

Gross Margin per Transaction

per user is the average number of individual transactions per user in a given period.

An individual transaction is defined as the placement

of an order by a user on our Platform.

We use this measure to determine the overall performance of our products on a per user basis.

When considered with the other operating metrics, transactions per user provides insight into user stickiness and buying patterns and

is a useful tool to identify our most active users, which enables us to deploy more targeted marketing and other strategic initiatives.

This metric also gives us the ability to categorize users based on their performance and determine where to expend marketing and/or operational

Transactions per user may be subject to variables that are outside of our control, for instance the size and popularity of

a particular lottery game.

Per Transaction

per transaction is the average number of lottery game tickets purchased by a user per transaction.

We use this measure to analyze the

impact of product performance with our customers on the number of tickets sold in one transaction.

We believe this metric is useful for

our investors because it gives insight into the buying habits of our users.

Similar to transactions per user, tickets per transaction

may be subject to variables that are outside of our control, for instance the size and popularity of a particular lottery game.

Revenue Per Transaction

revenue per transaction is the average gross amount of revenue per transaction.

We use this measure to determine how our top line revenue

is performing on a per transaction basis, which helps us to identify and evaluate pricing trends.

We believe this metric is useful for

our investors because it provides insight into our revenue growth potential on a per transaction basis.

Profit Per Transaction

profit per transaction is our average gross profit per transaction, calculated as gross revenue less the cost of the lottery game ticket

and any processing fees, including labor, printing and payment processing, per transaction.

We believe this metric to be useful to evaluate

and analyze our costs and fee structure across product offerings and user cohorts, and additionally, helps our investors because it provides

insight into our profit growth potential on a per transaction basis.

Margin Per Transaction

margin per transaction is calculated by dividing gross profit per transaction by gross revenue per transaction.

We consider this metric

to be a measure of overall performance that provides useful information about the profitability of our B2C Platform and B2B API businesses.

of Our Results of Operations (Prior to the Operational Cessation)

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face value of all lottery games purchased.

For example, the service fee for the purchase of five $2 tickets is $1.60, being the $1 base

For example, the service fee for the purchase of five $2 tickets is $1.60, comprised of the $1 base

service fee, plus 6% of the aggregate value of the face value of all lottery games purchased.

The Company did not operate its B2C platform in 2023.

Internationally,

we impose a mark-up on the cost to be imposed on the sale of each lottery game together with a service fee to be charged to the user.

In 2021, our international B2C Platform users purchased an average of 2.1 lottery games per transaction at an average service fee and

ticket price mark-up of $2.30 per lottery game.

We typically charge a higher service fee on lottery games in our international jurisdictions,

and, as a result, in 2021, the average service fee per international transaction was 90% higher than domestic transactions.

revenues from our international jurisdictions have historically comprised 10% of our total revenue s, we are focused on the growth of

this business organically and through the pursuit of strategic acquisitions and other synergistic opportunities.

B2C sales in jurisdictions where we do not have direct or indirect authority generate an immaterial amount of revenue, and we are assessing

our operations in these jurisdictions.

As discussed above, our B2C Platform is not currently operational.

We anticipate that our B2C

Platform will become operational by mid-year 2024.

from B2B API.

Together with our third-party commercial partner, we agree on the amount of the mark-up on the cost to be imposed on

the sale of each lottery game purchased through the B2B API, if any, together with a service fee to be charged to the user;

up to 50% of the net revenues from such mark-up and service fee pursuant to our commercial agreement with each commercial partner.

the U.S., the Company’s average gross revenue per such lottery game sale was $2.59.

Internationally, the Company’s average

gross revenue per lottery game sale was $3.96.

We currently do not charge our commercial partners a fee for the use of the B2B API.

Together with our third-party commercial partner(s), we agree on the amount of the technology usage fee to be imposed

on the sale of each lottery game purchased through the B2B API, if any, together with a service fee to be charged to the user;

up to 50% of the net revenues from such technology usage fee and service fee pursuant to our commercial agreement with each commercial

As discussed above, following the Operational Cessation, our B2B API Platform resumed limited operations in April 2023.

Commercial acquirers of our Data Service pay a subscription for access to the Data Service and, for acquisition of certain

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anonymized transaction data pursuant to multi-year agreements and in accordance with our Terms of Service in consideration of a fee.

Our Data Services operations were not impacted by the Operational Cessation.

Operating Costs and Expenses

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Trends and Factors Affecting Our Results

following describes the trends associated with our business prior to the Operational Cessation that impacted, and which we

expect may continue to impact, our business and results of operations in a material way:

following describes the trends associated with our business prior to the Operational Cessation that have impacted, and which we expect

will continue to impact, our business and results of operations in a material way:

International

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regulatory approvals necessary to provide services and products within new and emerging markets.

Largely as a result of the COVID-19

pandemic and more recently as a result of the war in Ukraine, the international jurisdictions where we operate and seek to expand have

been subject to increasing foreign currency fluctuations against the U.S.

dollar, soaring inflation and political and economic instability.

We expect these trends to continue during fiscal 2022 and believe they are likely to cause a material decrease in consumer spending,

which could have a material impact on our revenues.

We expect that it will take a longer period of time to achieve revenue gains or generate

cash in the new regions or any new international jurisdictions in which we expand, outside of our domestic geographies.

The international jurisdictions where

we operate and seek to expand have been subject to increasing foreign currency fluctuations against the U.S.

dollar, inflationary pressures

and political and economic instability.

We expect these trends to continue during fiscal 2024 and believe they are likely to affect consumer

spending, which could have a material impact on our revenues.

As a result, it may take longer to achieve projected revenue gains or

generate cash in any such regions affected or any new foreign jurisdiction into which we expand.

of a new gaming platform .

We have developed a proprietary gaming platform, which we have named Project Nexus.

Project Nexus is

designed to handle high levels of user traffic and transaction volume, while maintaining expediency, security, and reliability in

processing lottery game sales, the retail requirements of the B2C Platform, the administrative and back-office functionality

required by the B2B API, and the claims and redemption process.

We expect to utilize this platform to launch new products, including

any proprietary products we may introduce.

The introduction of new technology like Project Nexus is subject to risks including, for

example, implementation delays, issues successfully integrating the technology into our solutions, or the possibility that the

technology does not produce the expected benefits.

The initial phase of Project Nexus was implemented in the second quarter of 2022.

We developed a proprietary, blockchain-enabled gaming platform, which we named Project Nexus.

Project Nexus is designed to handle high levels of user traffic and transaction volume, while maintaining expediency, security, and reliability

in (i) the processing of lottery game sales, (ii) fulfillment of retail requirements of the B2C Platform, (iii) the administrative and

back-office functionality required by our B2B API, and (iv) the requirements of our claims and redemption process.

We expect to utilize

this platform to launch new products, including any proprietary products we may introduce.

The introduction of new technology like

Project Nexus is subject to risks including, among other things, implementation delays, issues successfully integrating the technology

into our solutions, or the possibility that the technology does not produce the expected benefits.

growth plans and the competitive landscape.

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on increasing our penetration in our existing U.S.

jurisdiction by increasing direct to consumer marketing campaigns, introducing our

jurisdictions by increasing direct to consumer marketing campaigns, introducing our

B2C Platform into new U.S.

and international jurisdictions and

acquiring synergistic regulated and sports betting enterprises domestically and abroad.

Competition in the sale of online lottery games

has significantly increased in recent years, is currently characterized by intense price-based competition, and is subject to changing

technology, shifting needs and frequent introductions of new games, development platforms and services.

To maintain our competitive edge

alongside other established industry players (many of which have more resources, or capital), we expect to incur greater operating expenses

in the short-term, such as increased marketing expenses, increased compliance expenses, increased personnel and advisory expenses associated

with being a public company, additional operational expenses and salaries for personnel to support expected growth, additional expenses

associated with our ability to execute on our strategic initiatives including our aim to undertake merger and acquisition activities,

as well as additional capital expenditures associated with the ongoing development and implementation of Project Nexus.

Current Plan of Operations

As of the date of this Amended

Report, the Company’s primary revenue drivers are the resumption of its B2B API platform and the launch of Sports.com.

It is anticipated

that operational costs for the next 12 months through April 30, 2024 will be greater than revenues.

It is anticipated that the liquidity

gap will be satisfied by equity or debt raised, of which there is no assurance.

Beyond the next 12 months, the

Company plans to re-launch its B2C Platform and continue to expand in domestic and international jurisdictions.

The Company plans to enhance

its mobile application to include pool plays, tickets subscriptions, loyalty programs and various gamification modules.

and select foreign jurisdictions and acquiring synergistic regulated and sports betting enterprises domestically

in the sale of online lottery games has significantly increased in recent years, is currently characterized by intense price-based

competition, and is subject to changing technology, shifting needs and frequent introductions of new games, development platforms

and services.

To maintain our competitive edge alongside other established industry players (many of which have more resources, or

capital), we expect to incur greater operating short-term expenses, such as increased marketing expenses, increased compliance

expenses, increased personnel and advisory expenses associated with being a public company, additional operational expenses and

salaries for personnel to support expected growth, additional expenses associated with our ability to execute on our strategic

initiatives including our aim to undertake merger and acquisition activities, as well as additional capital expenditures associated

with potential further development of Project Nexus, the initial phase of which was implemented in the second quarter of 2022.

Plan of Operations

of the date of this Amended Report, the Company’s primary revenue drivers are the resumption of its B2B API platform and the launch of

It is anticipated that operational costs for the next 12 months through April 30, 2024 will be greater than revenues.

is anticipated that the liquidity gap will be satisfied by equity investment or debt incurred, of which there is no assurance.

We anticipate

that our B2C Platform will become operational by mid-year 2024.

the next 12 months, the Company plans to continue to expand in domestic and international operations.

The Moreover, the Company plans

to enhance its mobile application to include pool plays, ticket subscriptions, loyalty programs and various gamification modules.

of Operations

Our consolidated financial statements

have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability

and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include

adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should

we be unable to continue in operation.

We will require additional capital to meet our long-term operating requirements.

We expect to raise additional capital through, among

other things, the sale of equity or debt securities.

raise additional capital through, among other things, the sale of equity or debt securities.

Ended December 31, 2023 Compared to Year Ended December 31, 2022

following table summarizes our results of operations for the years ended December 31, 2023 and December 31, 2022, respectively.

Years Ended December 31,

For the Year Ended December 31,

Cost of revenue

$ (1,147,377 )

Operating expenses:

Personnel costs

$ (32,544,279 )

Professional fees

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Total operating expenses

Income (loss) from operations

(31,854,032 )

Loss from operations

$ (25,167,116 )

$ (55,873,771 )

$ (30,706,655 )

Other expenses

Interest expense

Reserve for loss of prepaid advertising credits

Other expense

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$ (35,003,610 )

Other comprehensive loss

Foreign currency translation adjustment, net

comprehensive loss

currency translation adjustment, net

Comprehensive

$ (25,809,928 )

$ (60,378,988 )

Net income attributable to noncontrolling interest

Net loss attributable to Lottery.com Inc.

income attributable to noncontrolling interest

loss attributable to Lottery.com, Inc.

$ (25,537,315 )

$ (59,999,072 )

Net loss per common share

Basic and diluted

Weighted average common shares outstanding

Basic and diluted

Revenue for the

year ended December 31, 2021 was $16.4 million, an increase of $9.0 million, or 120%, compared to revenue of $7.5 million for the year

ended December 31, 2020.

The increase in revenue was driven by increased lottery game sales as a result of the availability of large multi-state

lottery game jackpots in the first quarter of 2021.

Additionally, we believe that our increased brand recognition resulted in an increasing

number of users on our Platform, as well as increased lottery game sales during 2021.

Cost of Revenue.

revenue for the year ended December 31, 2021 was $8.2 million, an increase of $5.2 million, or 176%, compared to cost of revenue of $3.0

million for the year ended December 31, 2020.

The increase in the cost of revenue was driven by the increase in the number of lottery

games sold in 2021.

Revenue for the year ended December 31, 2023 was $7.0 million, an increase of $200 thousand, or 3%, compared to revenue of $6.8 million

for the year ended December 31, 2022.

Revenue was up slightly for the year ended December 31, 2023 with a change in the mix which was

more heavily weighted to ticket sales and data services and less to services delivered to partners.

Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing

Gross Profit.

for the year ended December 31, 2021 was $8.3 million, compared to $4.5 million for the year ended December 31, 2020, an increase of $3.7

million, or 83.1%.

This increase was due to the sale of $9 million worth of Data Services, which did not incur any costs, and an overall

increase in the number of lottery games sold.

Cost of revenue for the year ended December 31, 2023 was $5.7 million, an increase of $1.4 million, or 31%, compared to cost of

revenue of $4.3 million for the year ended December 31, 2022.

The increase in COGS is the result of a product mix that was more heavily

weighted towards products and less on higher-margin services for the year ended December 31, 2023.

In 2022 there was revenue from services

provided to partners that had lower costs and higher margins.

Gross profit for the year ended December 31, 2023 was $1.3 million, compared to $2.5 million for the year ended December 31,

2022, a decrease of $1.2 million, or (46%).

This decrease was the result of higher cost of sales on higher ticket revenue in 2023 than

in 2022 and because higher margin revenue for services provided to partners in 2022 was not recurring.

Costs and Expenses

For the Year Ended December 31,

Operating expenses:

Personnel costs

(32,544,279 )

Professional fees

Sales & marketing

General and administrative

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Total operating expenses

Operating expenses for the year

ended December 31, 2021 were $38.1 million, an increase of $29.9 million, or 364%, compared to $8.2 million for the year ended December

The increase was primarily driven by increased professional and administrative expenses associated with the Business Combination,

increased stock compensation expense, increased headcount to support the Company’s growth, increased marketing spends resulting

from the use of Gatehouse Media credits, which we received several years ago in exchange for warrants, and increased amortization expenses

driven by acquisitions made during the 2021 fiscal year.

Personnel Costs.

costs increased by $16.0 million, or 359%, from $4.5 million for the year ended December 31, 2020, to $20.5 million for the year ended

December 31, 2021.

The increase was due to increases in headcount to support the growth of the Company’s business operations and

to support public company functions as well as stock compensation expense.

Professional fees increased by $7.2 million, or 639%, from $1.1 million for the year ended December 31, 2020 to $8.3 million

(31,854,032 )

expenses for the year ended December 31, 2023 were $26.5 million, a decrease of $31.8 million, or 55%, compared to $58.3 million for

the year ended December 31, 2022.

The decrease was primarily driven by decreased stock compensation expense, decreased headcount, decreased

marketing spend and decreased depreciation and amortization expenses during the 2023 fiscal year.

Personnel costs decreased by $32.5 million, or 88%, from $37.1 million for the year ended December 31, 2022, to $4.6 million

for the year ended December 31, 2023.

The increase was driven by legal and professional fees associated with the Business Combination

and Marketing.

Sales and marketing expenses for the year ended December 31, 2021 were $1.9 million, compared to $0.3 million for

the year ended December 31, 2020, an increase of $1.6 million, or 502%.

The Company used $1.0 million of Gatehouse media credits in 2021

as compared to $0.3 million used in 2020, which credits were received by the Company in consideration of the issuance of the Company’s

Additionally, spend on non-digital advertising and public relations activities increased throughout the year in conjunction

with our growth plans.

The decrease was due primarily to decreases in stock compensation expense by $25.7 million combined

with lower headcount in 2023.

Professional fees increased by $128 thousand, or 2% from $6.61 million for the year ended December 31, 2022 to $6.74 million

for the year ended December 31, 2023.

While there were decreases in other types of professional fees, the increase was driven by fees

for outside attorneys and accountants helping the company complete amended and new filings of reports 10-K and 10-Q during 2023 to regain

compliance with reporting requirements.

and Administrative.

General and administrative expenses increased $2.4 million, or 306%, from $0.8 million for the year ended December

31, 2020 to $3.1 million for the year ended December 31, 2021.

These costs increased in general with the growth of the business and can

be broken down further into:

increased travel of $0.4 million for business development opportunities, increased business licensing, bank

fees, and insurance of $0.9 million, and $0.8 million of additional office and software-related costs to support the increased headcount.

General and administrative expenses of $9.5 million for the year ended December 31, 2023 are $472 thousand, or

5%, higher than the $9.0 million reported for the year ended December 31, 2022.

For the year ended December 31 2023, general and administrative

expenses include write-offs to goodwill of $5.6 million related to the TinBu subsidiary and $1.1M related to the Global Gaming subsidiary

as well as write offs of $800 thousand related to intangible assets of Global Gaming.

Without these write-offs for impairment of intangible

assets, which total $ 7.5 million, general and administrative expenses for 2023 would have been $1.97 million and 78% lower than in 2022.

Some key drivers of the decrease for the year ended December 31, 2023 were business insurance expense $3 million lower, expensed developed

software $530 thousand lower, software services $200 thousand lower, royalty expense $160 thousand lower, and facilities rent $110 thousand

lower than for the year ended December 31, 2022.

and Amortization.

Depreciation and amortization increased $2.8 million, or 180%, from $1.5 million for the year ended December 31,

Depreciation and amortization increased $90 thousand, or 1%, from $5.6 million for the year ended December 31,

2022 to $5.7 million for the year ended December 31, 2023.

The increase was driven by the acquisition of the sports.com domain name in

2021 as well as the intangibles created through the purchase of Global Gaming.

Expense, Net .

Years Ended December 31,

The increase is due to a full year of amortization for Project Nexus in 2023

vs only half a year in 2022 as it was placed in service and amortization began mid-year 2022.

For the Year Ended December 31,

Other expenses

Interest expense

Reserve loss of prepaid advertising credits

Other expense

Total other expenses, net

Interest expense increased by $18.6 million, or 1,519%, for the year ended December 31, 2021, as compared to the year ended

December 31, 2020.

This increase relates to amortization of debt discounts and beneficial conversion features for additional convertible

debt and short-term loans issued in 2021, most of which was converted into equity at the time of the Business Combination or settled

in cash following the Closing.

Reserve loss of prepaid advertising

Reserve loss of prepaid advertising credits increased by $2.0 million for the year ended December 31, 2021 as compared to

the year ended December 31, 2020.

This increase was driven primarily by concern about management’s assessment regarding the Company’s

ability to utilize the advertising credits.

Other Expense.

Other expense

increased by $2.0 million, or 230.7%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020.

This increase

was driven primarily by $1.5 million of additional revenue share expense based on increased revenue in 2021 as compared to 2022.

Additionally,

there was $0.5 million in fees incurred during 2021 as part of a settlement with a subsidiary’s former shareholders.

Interest expense decreased by $394 thousand, or (51%), for the year ended December 31, 2023, from $765 thousand to $376

thousand as compared to the year ended December 31, 2022.

This decrease relates primarily to interest on the Bank Prov line of credit

in 2022 which did not occur in 2023.

Other expense decreased by $3.6 million, or (96)%, for the year ended December 31, 2023 as compared to the year ended December

31, 2022 from $3.7 million to $136 thousand.

This decrease was driven primarily by a discount on an asset with periodic payments of $3.5

million which was recorded in 2022.

and Capital Resources

to the Operational Cessation, our primary need for liquidity was to fund working capital requirements of our business, growth, capital

expenditures and for general corporate purposes.

Our primary source of liquidity had historically been funds generated by financing activities.

Upon the Closing on October 29, 2021, we received net proceeds of approximately $42.8 million in cash.

to the Operational Cessation, our primary need for liquidity was to fund working capital requirements of our business, growth,

capital expenditures and for general corporate purposes.

Our primary source of liquidity had historically been funds generated by

financing activities.

Upon the Closing of the business combination on October 29, 2021, we received net proceeds of approximately

$42.8 million in cash.

the Operational Cessation, our primary need for liquidity has been to fund the restart of our business operations, re-hire employees

and pay our expenses.

As of the date of this Amended Report, our sole source of liquidity is the funds provided to us under the Loan

Agreement with Woodford, of which $1.25 million remains available to us under such agreement.

We expect that the most likely source

of such future funding presently available to us is through additional borrowings under the Loan Agreement or through the issuance of

equity or debt securities.

If Woodford does not advance us amounts owed under the Loan Agreement or we are otherwise not able to secure

the necessary capital to restart our operations, hire new employees, and obtain funding sufficient to support and restart our operations,

we may be forced to permanently cease our operations, sell off our assets and operations, and/or seek bankruptcy protection, which could

cause the value of our securities to become worthless.

The most likely source of such future funding presently available to us is through additional borrowings under

loan agreements or through the issuance of equity or debt securities.

If lenders do not advance us amounts as agreed under loan agreements

or we are otherwise not able to secure the necessary capital to restart our operations, hire new employees, and obtain funding sufficient

to support and restart our operations, we may be forced to permanently cease our operations, sell off our assets and operations, and/or

seek bankruptcy protection, which could cause the value of our securities to become worthless.

conditions, along with our current lack of material revenue producing activities, and significant debt, raise substantial doubt about

our ability to continue as a going concern for the next 12 months.

For more information, see Note 2 – Significant Accounting Policies, Going Concern to the consolidated

financial statements included herein, as well as the risk factors included in Item 1A of this Amended Report entitled “ In July

2022, we furloughed the majority of our employees and suspended our lottery game sales operations after determining that we did not have

sufficient financial resources to fund our operations or pay certain existing obligations, including our payroll and related obligations.

As a result, we may not be able to continue as a going concern ” and “ We need additional capital to, among other things,

support and restart our operations, re-hire employees and pay our expenses.

Such capital may not be available on commercially acceptable

terms, if at all.

If we do not receive the additional capital, we may be forced to curtail or abandon our plans to recommence our operations

and we may need to permanently cease our operations.

For more information, see Note 2 - Significant Accounting Policies ,

Going Concern to the consolidated financial statements included herein, as well as the risk factors included in Item 1A of this Amended Report

entitled “ In July 2022, we furloughed the majority of our employees and suspended our lottery game sales operations after determining

that we did not have sufficient financial sources to fund our operations or pay certain existing obligations, including our payroll and

related obligations.

As a result, we may not be able to continue as a going concern ” and “ [w]e need

additional capital to, among other things, support and restart our operations, re-hire employees and pay our expenses.

Such capital may

not be available on commercially acceptable terms, if at all.

If we do not receive the additional capital, we may be forced to curtail

or abandon our plans to recommence our operations and we may need to permanently cease our operations.

Debt Obligations

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the noteholders executed amendments in February 2021 to extend the maturity date to December 21, 2021.

As of December 31, 2021 and December

31, 2020, the balance of these notes was $771,500 and $821,500, respectively.

November 2019 through October 28, 2021, we issued approximately $48.2 million in aggregate principal amount of Series B convertible promissory

The notes bear interest at 8% per year, were unsecured, and were due and payable on dates ranging from December 2020 to December

The notes bore interest at 8% per year, were unsecured, and were due and payable on dates ranging from December 2020 to December

For those promissory notes that would have matured on or before December 31, 2020, the parties extended the maturity date to December

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prior to the Closing, approximately $60.0 million of convertible debt was converted into equity of AutoLotto.

As of December 31, 2021,

we had no convertible debt outstanding.

See “— Recent Developments— Loan Agreement with Woodford ”

above for additional information on the terms of the Loan Agreement.

Prior to the Operational Cessation, net cash provided used by operating activities was $23.2 million for the

year ended December 31, 2021, compared to net cash provided by operating activities of $4.7 million for the year ended December 31, 2020.

Factors affecting changes in operating cash flows were interest and stock-based compensation expense along with increased expenses for

professional fees, personnel costs, and sales and marketing activities in 2021 as compared to 2020.

Net cash used in investing activities

during the year ended December 31, 2021 were $13.9 million, compared to $0.0 million for the prior year.

The increase was primarily the

result of the acquisition of the sports.com domain name as well as the acquisition of Global Gaming completed on June 30, 2021.

provided by financing activities was $59.0 million for the year ended December 31, 2021, compared to $6.0 million for the year ended December

The increase was primarily due to the issuance of debt and proceeds from the Business Combination offset by repayments during

As of December 31, 2023, we had $2,570,993 of convertible debt outstanding.

Overview and Recent Developments:

“Loan Agreement with Woodford ,” “Loan Agreement with

United Capital Investments London Limited,” and “Placement Agent Agreement with Univest Securities, LLC” above

for additional information.

cash used by operating activities was $2.4 million for the year ended December 31, 2023, compared to net cash used by operating

activities of $31.3 million for the year ended December 31, 2022.

Factors affecting changes in operating cash flows were stock-based

compensation expense along with decreased expenses for personnel costs, and sales and marketing activities in 2023 as compared to

Net cash used in investing activities during the year ended December 31, 2023 was $0, compared to $1.3 million for the prior

The decrease was because there were no expenditures for development of intangible assets during 2023.

Net cash provided by

financing activities was $2.3 million for the year ended December 31, 2023, compared to $16 thousand used by financing activities

for the year ended December 31, 2022.

The increase was due to funding received under convertible debt arrangements in

in or Adoption of Accounting Practices

3 unchanged sentences

Pronouncements that are not

applicable or where it has been determined do not have a significant impact to the Company have been excluded herein.

applicable or where it has been determined do not have a significant impact on the Company have been excluded herein.

606, Revenue from Contracts with Customers

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and Cost Recognition

May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09,

May of 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09,

Revenue from Contracts with Customers (Topic 606) (“ASC 606”), amending revenue recognition guidance and requiring a more

110 unchanged sentences

Tax Asset and Valuation Allowance

Accounting for deferred

tax assets, including those arising from tax loss carry-forwards, requires management to assess the likelihood that we will generate

sufficient taxable earnings in future periods in order to utilize recognized deferred tax assets.

Assumptions about the generation of

future taxable profits depend on management’s estimates of future cash flows.

In addition, future changes in tax laws could limit

our ability to obtain tax deductions in future periods.

for deferred tax assets, including those arising from tax loss carry-forwards, requires management to assess the likelihood that we will

generate sufficient taxable earnings in future periods in order to utilize recognized deferred tax assets.

Assumptions about the generation

of future taxable profits depend on management’s estimates of future cash flows.

In addition, future changes in tax laws could

limit our ability to obtain tax deductions in future periods.

To the extent that future cash flows and taxable income differ significantly

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of the potential differences in accounting standards used.

Quantitative and Qualitative Disclosures About Market Risk.

a “smaller reporting company” as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K/A

Item 7. Management’s Discussion and Analysis